Saudi Arabia (SA)
Saudi Arabia is the largest country in the Middle East and the world's leading oil producer — a rapidly transforming absolute monarchy embarking on an ambitious Vision 2030 diversification agenda that has already delivered entertainment venues, mixed-gender events, a booming tourism sector, and the Riyadh Metro.
Tax & Payslip Guide
Understanding your taxes in Saudi Arabia — tax year Saudi Arabia uses the Hijri (Islamic) calendar for government and Zakat purposes, and the Gregorian calendar for VAT and most business purposes. Calendar year (1 January – 31 December) for personal income purposes (though no income tax applies)..
📊 Income Tax Brackets
| Income from | Income to | Rate | Notes |
|---|---|---|---|
| 0 | ∞ | 0% | Saudi Arabia has zero personal income tax on employment income for all residents (Saudi and expat). All salary, bonuses, housing allowances, and other employment benefits are received tax-free. This is one of the most significant financial advantages of working in Saudi Arabia. |
🏛️ Social Contributions
From 1 July 2024, Saudi Arabia extended the SANED (Unemployment Insurance / التأمين ضد التعطل) scheme to expatriate private-sector employees. Expats hired on or after 1 July 2024 pay 1% SANED contribution and employers pay an additional 1% SANED + the existing 2% occupational hazard GOSI. Expats hired before July 2024 may remain on legacy terms (0% employee, 2% employer occupational hazard only). SANED entitlements for expats are limited compared to Saudi nationals. Verify your specific contract terms and current GOSI/SANED rates at gosi.gov.sa.
Saudi national employees pay 9.75% of basic salary. Employers contribute 11.75%. Total 21.5% goes to pension, disability, and death benefits. Does not apply to expat employees.
🛒 VAT Rates
Saudi Arabia raised VAT from 5% to 15% in July 2020 to address COVID-19 fiscal pressures. The 15% rate applies to most goods and services. ZATCA (the Saudi tax authority) enforces VAT compliance strictly with e-invoicing (Fatoorah) mandatory for all VAT-registered businesses in 2026. VAT registration threshold: SAR 375,000 annual taxable turnover (mandatory) or SAR 187,500 (voluntary). Penalties for non-compliance can reach SAR 100,000+.
🧾 Sample Payslip Decoder
🌍 Special Expat Tax Rules
Saudi Arabia is one of the world's last major economies with zero personal income tax. All employment income — basic salary, housing allowance, transport allowance, education allowance, bonuses, and end-of-service benefits — is received without any Saudi income tax deduction. The primary financial obligations for expats are: (1) Home country tax filing obligations — US citizens must file IRS returns regardless of residence; UK nationals may retain UK tax residency; Australians may retain Australian tax residency depending on the Statutory Residence Test. (2) The Dependent Levy of SAR 100/month per dependent is a government fee, not a tax per se, but affects net income. (3) Zakat (Islamic alms, 2.5%) applies to qualifying Muslim Saudi nationals on business profits and certain assets — expats are not subject to Zakat on employment income.
📋 Double Tax Treaties
Saudi Arabia has Double Tax Avoidance Agreements (DTAs) with over 50 countries as of 2026, including: France, Germany, UK, China, Japan, South Korea, India, Pakistan, Malaysia, Turkey, Italy, Spain, Greece, Austria, Romania, Hungary, Poland, and many others. The US-Saudi Arabia DTA is limited. DTAs generally cover business profits, dividends, interest, and royalties — not employment income (which is zero-taxed in Saudi Arabia anyway). For expats with home-country business interests or investment income, DTAs can prevent double taxation. Check GAZT/ZATCA website for the current treaty list.
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